IDC Korea Announces 4.4% Growth in Domestic Software Market Last Year
The adoption of cloud-based solutions continues to increase

The domestic software market grew by 4.4% last year compared to 2015, and is projected to increase by approximately 3.7% this year.

According to a recent report by IDC Korea (CEO Hong Yoo-sook) titled "Korea Software Market Outlook Report 2017-2021," the domestic software market has surpassed 4 trillion won for the first time, recording a size of 4.045 trillion won (based on software licenses).

This year, the market is expected to reach 4.1947 trillion won, and it is projected to grow at an annual average rate of 3.2% over the next five years, reaching 4.731 trillion won in 2021.

As the demand for IT-based business innovation expands within companies, digital transformation is emerging as a key topic in large-scale IT and business process improvement initiatives. Among them, there is a growing demand for software capabilities for utilizing next-generation technologies based on the 3rd Platform, such as cloud, mobility, big data, and IoT.

According to the report, alongside the recent growth of the cloud market, there is an expanding demand for switching from foreign to domestic ERP systems. In the CRM sector, the adoption of cloud-based CRM solutions is increasing, primarily among large and mid-sized enterprises, as a response to the increasingly complex sales environment. Meanwhile, in the business analytics market, which is expected to experience continuous growth, there is a growing trend of business units taking the lead, whereas in the past, IT organizations dominated the process. Consequently, demand is projected to rise for business-led data visualization, collaboration solutions for data analysis results, and big data analytics solutions.

Choi Moon-soo, an analyst at IDC Korea Enterprise Research Group, stated, "The adoption of cloud-based solutions is continuously increasing in the domestic software market." However, he noted that concerns regarding performance, compatibility, and security still remain, making it difficult to transition all essential business solutions to the cloud. Choi further explained, "Improving security issues in cloud-based software requires not only efforts from vendors but also an improvement in user awareness." He added, "Now is the time for a strategy that utilizes existing on-premises methods for core business applications while gradually transitioning to cloud-based systems, starting with applications used for lighter tasks."